UKEF may Finance Iran Aircraft Deal

Iran’s Deputy Transport Minister Asghar Fakhrieh Kashan said UK Export Finance (UKEF) is in talks with the Islamic Republic to facilitate the financing of aircraft sales to the country’s national flag-carrier airline Iran Air.

“We have received some offers from UKEF, that is under review by Iran,” Fakhrieh Kashan told Reuters on Thursday.

He added that the UKEF, a government agency responsible for the UK’s share of European government export financing for Airbus sales, had tentatively offered support for least some Airbus jets built in Britain, France, Germany and Spain.

It could also offer some support to Airbus’s US rival, Boeing, the Iranian official added.

According to the report, if UKEF provides support for Boeing deliveries, it would not be the first time, but it would be rare. The main proviso is that a certain proportion of parts in each jet need to be made in Britain – usually 20 percent.

For Boeing exports, that would typically mean the jets would have to have Rolls-Royce engines. The Boeing planes ordered by Iran all have engines made by US supplier General Electric (GE) and its French partner Safran.

On April 4, Iran signed an agreement with Boeing for buying dozens of the company’s twinjet narrow-body passenger planes.

The agreement involves the purchase of 30 Boeing 737 MAX planes as well as the purchase rights for an additional 30 planes of the same class. It was signed between Iran’s Aseman Airlines and Boeing in Tehran.

Boeing is to provide 50 planes of the same type to Iran Air through a similar agreement. The overall value of Iran Air’s order that also involves 30 long-range wide-body 777 aircraft is estimated to be $16.6 billion.

During a January 2016 visit to Paris by Iranian President Hassan Rouhani, Tehran also signed a major contract with Airbus worth about $27 billion to buy 118 planes.